Study of the Incidence and Nature of Chronic Poverty and Development Policy in South Africa: An Overview, CPRC Working Paper No. 3

Contents

Abstract

The purpose of this study is fourfold: first, to summarise the current
state of knowledge about chronic poverty in South Africa; second, to
describe the range of existing governmental and civil society
initiatives which address chronic poverty; third, to identify challenges
to addressing chronic poverty in South Africa; and fourth, to identify
themes for further research.

For the purposes of this study, a household or individual is understood
to be in chronic poverty when its or her condition of poverty endures
over a period of time. Different researchers propose alternative time
periods as characteristic of chronic poverty (e.g. six months, ten
years), usually taken to mean that the household or individual remains
beneath the poverty line for all or virtually all of this period.
Alternatively, and perhaps more meaningfully, chronic poverty can be
understood as a household's or individual's inability, or lack of
opportunity, to better its circumstances over time or to sustain itself
through difficult times. As such, chronic poverty can be a function of
the individual's characteristics (e.g. elderly, disabled), or of the
environment (e.g. sustained periods of high unemployment, landlessness),
or very likely of both. Indeed, a common scenario in South Africa
involves the coincidence between poor health, meagre education, and
fractured families, on the one side, with skewed resource distribution,
inadequate infrastructure, and scarce employment opportunities, on the
other side. The combination is more than sufficient to trap many people
in poverty, i.e. to make them chronically poor.

To date, there has been only one data set collected in South Africa
allowing an inter-temporal comparison among the same households. This is
the KwaZulu-Natal Income Dynamics Study (KIDS), which as the name
implies covers one of the provinces rather than the whole country.
Because this data set and the analyses based upon it are unique, we
discuss them at length. One of the important findings from the KIDS data
is that 22% of the 1200 African households that were surveyed, were poor
in both 1993 and 1998. This represents about two-thirds of all
households that were poor in 1993, and one-half of those that were poor
in 1998, meaning that at least half of those households that are poor,
are chronically poor. Another interesting finding is that
'ultrapoverty' is not synonymous with chronic poverty. In other words,
a household that is just below the poverty line in one period is no more
likely to move above the poverty line in the next period, as a household
that started off much further below the poverty line. A key determinant
of whether a household stays in poverty, escapes from poverty, or falls
into poverty, is how that household fares in terms of employment. One of
the surprising findings from the KIDS data set was the degree of
employment volatility experienced by households. Notwithstanding
household income sources other than formal sector employment, these
apparently make the difference between survival and total destitution,
but less commonly between being poor and being non-poor.

The KIDS-based studies as well as other poverty analyses, allow us to
identify groups especially likely to be chronically poor. These include
rural households, women-headed households, households effectively headed
by elderly people, and former (retrenched) farm workers. Over the next
10 years, however, AIDS orphans and households directly affected by
AIDS, will likely figure as the most prominent category of people mired
in chronic poverty.

The paper goes on to survey the variety of anti-poverty measures of
government and civil society. Measured by expenditure, the government's
social security system is by far the largest antipoverty instrument in
the country, and probably one of the more functional.

As a gross generalisation, government-led developmental initiatives have
not proven to be terribly successful, not least because of the intrinsic
difficulty of the task they set themselves. A number of challenges face
government and civil society to address poverty in general and chronic
poverty in particular. Among these are: first, the absence of a coherent
anti-poverty strategy, and particularly one that takes into account the
distinction between chronic poverty and transitory poverty; second, the
bleak prospects for growth in formal sector employment over the medium
terms, together with general uncertainty about how to improve support to
the SMME sector; and third, the HIV/AIDS epidemic, the effects of which
will likely be far more apparent in the next 15 years than to date. The
paper concludes with suggested priority areas for further research.